Cumbersome and unrealistic: Scotland’s energy efficiency tax call

Category: Energy Efficiency

This colour coded thermal image shows exactly where this building is losing energy.

Poorly Performing Energy Efficiency Tax Housing – Reward Energy Efficient Homes?

Today’s news of a proposed stamp duty revamp based on energy efficiency for Scotland is, like so many green policies, fantastic in theory, cumbersome and unrealistic in practice.

Labour’s Malcolm Chisholm proposed an alternative to stamp duty on house purchases with a system that has financial incentives to benefit energy efficient homes.

As opposed to the Scottish government’s planned Land and Buildings Transaction Tax, which would see the amount paid being more closely related to the value of the property, Mr Chisholm called for tax levied to be varied depending on a property’s energy efficiency, as determined by its Energy Performance Certificate (let’s not forget that just last week it was revealed that one third of local authorities were in breach of energy regulations).

This, in theory, would reward the energy efficient homes while owners of poorly performing properties would pay more, meaning the tax payer would not lose out. Sounds reasonable, right?

Regrettably not. Let’s consider the current situation. The most recent government white paper on the subject revealed that 85% of domestic sector and 61% of commercial sector EPCs were non-compliant. In other words, barely worth the paper they were written on.

Furthermore, the focus on energy efficiency has escalated so dramatically in recent years that overwhelmed property owners simply do not know which direction to turn.

The Green Market has gone from crowded to overrun – packed full of confusing funding mechanisms, conflicting advice and technologies that often promise much but deliver little. Given, until recently, property owners concerned themselves with little more than defect reparation, it’s little wonder that most continue to bury their heads in the sand despite increasing pressure.

It’s simple power by numbers – if nobody does anything, everyone is in the same boat.

As such, while any incentive to make homes more energy efficient is generally a good thing, the fact of the matter is the timing of this proposal is premature to say the least and will simply result in the vast majority of properties owners paying more. Throw into the mix the added confusion on how it would be addressed in terms of multiple occupancy properties, tenements, blocks of flats and so on, and it’s clearly a problematic proposal.

Instead, government focus should be on the promotion of a more holistic approach that allows property stocks to be truly benchmarked and makes energy efficiency seem less scary and more achievable – a feat that requires significantly more time than the two years between now and when property tax is devolved to Scotland.

Infrared thermography is part of the solution. Providing property owners with a tangible, accurate view of energy loss, it is inexpensive, simple to understand and non-destructive. Crucially, it is also extremely quick and can provide a property owner with a clear breakdown of the direction they need to move in.

How the relevant measures are funded is the next issue and a far more pressing concern than rewarding those in a financial position to make the changes while punishing those who are not.

As a concept, the idea is sound, but introduction by 2015 would be foolhardy and merely a case of prosecuting property owners without giving them the right to a fair trial.